Gambling on the future…
- Click here to read how ING Direct France monitors its brand reputation online and in call centres
- Click here to read how Gatorade has aligned its brand product teams for a more effective social media strategy
- IHG CMO Tom Seddon discusses how digital is integrated into the company’s marketing strategy
Three-quarters of marketing chiefs plan to restructure their departments this year to keep pace with the demands of digital media, according to research exclusive to Marketing Week. To help marketers keep ahead of the wave of change, there are four key areas of reorganisation.
An astonishing 75% of chief marketing officers plan to rearrange their teams by the end of this year, according to a study seen exclusively by Marketing Week.
Why? Because new forms of media and communications are having such a fundamental effect on business that the customer is closer to becoming king than ever before. Meanwhile, many businesses that still operate under models that were designed for another time, are lagging behind consumer trends.
For three-quarters of marketing heads to be saying they are going to rejig teams at the same time seems like a bit of an epiphany, according to Chris Stutzman, principal analyst at Forrester Research, author of the study.
“It’s almost like a reality check went off within marketing leadership, where they realised they can’t be the brand of the future through yesterday’s organisation. There are a lot of driving forces behind this change, including the consumer having more control. Technology means you can now build your brand in ways you could have never imagined,” Stutzman says.
This reorganisation, in reaction to the huge changes afoot, can already be seen. Coca-Cola has hired media specialist Ivan Pollard, former managing partner of the groundbreaking Naked agency, to run ’global connections’ from its Atlanta head office to forge closer bonds with people in all types of media internationally.
And rival PepsiCo has rearranged its US teams on the Gatorade brand, launching a ’Mission Control’ room to monitor and respond to consumer conversations, a strategy it plans to roll out to the UK and Australia. Meanwhile, beauty giant L’Oréal recently hired MyMarketMonitor.com to monitor conversations about all of its brands.
Closer to home, MoreThan’s marketing director Peter Markey agrees that change has made the future of marketing uncertain. He says: “This is an evolving picture. It will be fascinating to see what the marketing department of the future will look like in terms of reorganisation. I think it will fuse the brilliance of yesterday – data, CRM and insight – with all the emerging technology of today, which will be very powerful. I sense a lot of marketers, me included, are on that journey right now.”
Marketing Week has identified four ways brands can do things differently in the wake of this new media explosion.
1 Get rid of the ghettos
Teams working on projects in their own ’world’ are the norm now but in the new marketing environment this can no longer be sustained, and the biggest impact on marketing will be how media is organised, according to Stutzman.
“It is the media part of these marketing organisations that are feeling the biggest pain, because we have these paid-for, earned and owned media ghettos. Paid-for media has been [handled by] traditional marketers, earned media has been PR but is now being driven by social media, and owned media is handled by the sponsorship or entertainment division,” he says.
Instead of thinking about function or type of media, marketers should be focusing on content, regardless of where it has come from or who has generated it.
Some businesses will want to reorganise quickly, as in the case of Coca-Cola, which got Pollard in to help break down these barriers. Others, such as Procter & Gamble, have been moving people from a digital-specific role to a wider marketing role over a number of years, to ensure their skills are broad and fit for the future.
InterContinental Hotels Group (IHG) has shaken up its marketing by rethinking its approach to media, as chief marketing officer Tom Seddon explains.
“The big change for us has been to stop focusing on just the paid-for media on the [media] plan and instead create a kind of schedule of all the owned media we have and then build out what media we could earn, rather than looking at that first column of paid-for, which we tended to do in the past. That sounds easy but it is harder to make it happen,” says Seddon. IHG consolidated its global media planning into Mindshare in 2009 to help start this process.
Printer specialist Epson is also trying to break down the barriers within its US team to make sure all marketing activity focuses on one main message. Chris Nickel, manager for CRM and direct response at Epson America, explains that while part of his role is to support the brand’s online store, there is a cultural shift in the company to work together better.
“My team, the marcoms group, PR and the advertising group are all together when products launch so we will all have a common goal. But it’s taken a cultural shift in the company to say ’hey, all of you silo groups are all one team, so let’s get together’,” Nickel says.
Similarly, one arm of Thomson Reuters plans to integrate social media with everything else, as Jonathan Petrino, part of the firm’s legal education ecommerce team explains. “Right now we have an isolated channel – we have a social media guy and, separately, we have a web marketer. But I am going to propose that we make it a single interactive team,” he says.
With the advent of new forms of media, the temptation is to get someone in to ’run’ the Twitter feed. But Forrester’s Stutzman warns: “If you create a specialist for social media, you have created another silo.”
2 Don’t hire a social media specialist
Stutzman says the companies that will survive this new media onslaught will be the ones that have leadership willing to get fully involved. He says senior management should sort things out for themselves rather than look to silo it off to a social media guru.
“Some say the chief executive or CMO doesn’t need to use Twitter or have a blog. But I disagree. They do need to get involved with something in social media. Marketers who don’t participate in the new technology that consumers adopt will never learn how to capitalise on it,” he says.
He points out that Best Buy’s US chief marketing officer Barry Judge has more than 17,000 followers on Twitter and is competing with chief executive Brian Dunn for the most fans. He says Judge answers comments himself and just last week he even went as far as to respond to a disgruntled customer who only has 10 followers on Twitter. And this from a busy CMO in a company turning over almost $12bn (£7.4bn) worldwide. Stutzman calls the pair: “A reflection of their organisation’s ability to embrace social media.”
Best Buy also encourages its staff to use social networking – all 155,000 of them worldwide, and manages some customer services through its Twelpforce, where staff answer queries direct through Twitter.
While social media and the kind of technology Best Buy sells may be a natural fit, this should not be an excuse for marketers to ignore Twitter or think that it is less relevant to them. Dunkin’ Donuts CMO John Costello insists that all key decision-makers monitor and react to its Twitter followers, as Forrester’s report highlights.
MoreThan’s Markey agrees that all of marketing should encompass social media. “As channels converge, it will be interesting to see if we do talk about social media as something separate. Because it should be integral to our strategy,” he states.
Markey has upped his monitoring of micro-blogging and social media channels with the advent of the MoreThan Freeman campaign earlier this year. Listening to feedback meant that the search strategy for the campaign was slightly tweaked in January. He now gets twice daily reports on what is being said about the brand rather than having to wait for monthly tracking.
And while Seddon at IHG has a Twitter account that he admits he doesn’t use, he says the group’s brands – including Holiday Inn, Indigo and Crowne Plaza – as well as individual properties, use social media.
The hotelier is about to hire a conversation-monitoring agency so it can make the most of what is being said about the brand, across the 90 countries in which it operates. Seddon adds that he views social in an experimental way. “Social is very fast changing and our general attitude is one of experimentation. I don’t think anyone has the magic formula yet, but we encourage experimentation and just keep trying to find things that work – it’s quite hard to predict,” he says.
3 Experiment and negotiate
Earlier this year, Marketing Week revealed that Panasonic has set aside 15% of its digital budget for trying new things in the UK. Forrester’s Stutzman backs this approach: “Prepare for changes in media by setting aside an ample experimentation budget. The only way for marketers to learn how to leverage emerging media is to test it out.”
Clearly in an age of austerity, experimentation budgets may be thin on the ground. But negotiation with other departments can mean that new forms of media can be used cost-effectively.
For example, when ING Direct in France wanted to launch an iPhone app, vice-president of marketing and communication Sophie Heller pushed for the things that would provide the best experience for users, putting together what her ’dream’ app would look like before considering constraints. “The IT department was pushing us to having a global platform that would have saved cost but it would have meant having a less-than-perfect customer experience online,” she says.
Negotiation with her “open-minded IT director” meant that Heller achieved the app she wanted at a cost that was right for the business. “If developing the app had just been led by cost it wouldn’t have been such a good experience for customers,” she says (see case study below for more on how ING is doing things differently).
Ford is another brand experimenting with social media. It used its ’adorers’ to launch the Fiesta Movement car in the US last year, giving 100 who it terms ’socially vibrant’ people the car to drive for six months. These people talked about the brand online, resulting in 40 million Twitter impressions and 130,000 registrations on FiestaMovement.com, months before the car was available to buy. More importantly, Ford claims sales conversions from test drives were ten times what they would have been for a traditional launch.
Disney Channel, too, is looking at how best it can use all forms of media, as its executive marketing director for UK & Ireland Nicole Morse explains: “We have been talking about digital and social media a long time, and we are definitely ramping it up now. We have been exploring it in the past, understanding the different avenues and what ROI it brings us and trying to set some benchmarks so that we can be smarter. As a result there are efficiencies and we can use our audience to be ambassadors.”
Morse adds that Disney is also looking at how it can better use its owned media such as DVDs and theme parks.
4 Get your customer service right
Many brands claim they think about their customers before anything else, and use the jargon term ’customer centric’ to describe their approach. But for Stutzman, few businesses actually do this.
“More than likely, an organisation is not set up to deliver a great customer experience,” he says. “But customer experience is almost becoming the new advertising. If someone gets a great experience they will tell people about it.”
ING Direct’s Heller says her business was set up as one which focuses on customer needs, and adds that her chief executive is fully behind making changes to make life easier for consumers. “My experience is that the CMO cannot [make fundamental changes] without the commitment of the CEO… social networks can be a shock and [using them] can be a very big change if a company does not put the customer at the centre of its corporate values,” she says.
Getting things right for the customer will also depend on brands thinking and talking like the customer. Consumers see no separation between paid-for advertising and the person on the end of a phone at a call centre. It is all communication from the same company – and not even a brand – as consumers don’t necessarily think of their mobile phone provider, supermarket or bank as a brand.
For shoe brand TOMS, which gives away footwear to a person in the developing world for every pair that is bought, social media is its only form of marketing. It needs to minimise its spend to make sure it can fund its buy-one, give-one model, as founder Blake Mycoskie explains: “For the business to work we have to depend on social media and viral marketing more than say Converse or Nike would. A lot of traditional ads are very expensive and we don’t have the budget, but we have more than 1 million people doing our marketing for us [through social media],” he says.
So, lack of money shouldn’t be a barrier to change. As Forrester’s report warns: In the future, there will be two types of companies: those that are agile and adapt to consumers’ changing behaviour and media consumption, and those that go out of business.
ING Direct ’experiment & negotiate’
ING Direct France started listening to what people were saying about it online in 2009, when vice-president of marketing and communications Sophie Heller joined the business.
Heller says looking at what is being said online about your brand is the first thing marketers should do when thinking about a reorganisation. “Brand is not what you say but what Google and social networks say. You need to make sure that what you say is completely aligned with what you do or what people perceive you do,” she says.
“We started to listen, analyse and understand who was talking, what kind of questions or fears they had. We used this to help update our website for prospects and we installed a feedback process so that employees were aware of everything that was on social networks or [coming up on] Google [searches]. So we created some knowledge that people outside marketing could benefit from,” she says.
To make sure that everyone understands what the brand means, Heller worked not just with people from her own department but also asked for volunteers from IT, operations and finance to come and explore ING Direct’s brand values and perceptions.
Doing this helped ING Direct start what Heller calls “deep work” on the brand, aiming to make sure all messages are consistent, and that the customer is at the centre of the business. She is currently working on how the call centre recruits staff to make sure that what they do is aligned with the brand promise.
Heller wanted to run an acquisition campaign in January, exploiting every possible channel. Most similar campaigns are months in the planning, but Heller had the idea on 22 November 2010 while on a plane and the campaign launched on 3 January 2011. Doing this required people to work differently.
“It was challenging. We had to put PR people together with those working offline, along with others working on promotion, Facebook and internal communications. It takes a little time but it is about changing working habits,” Heller says.
To reach a new audience ING Direct used a fashion coaching initiative, set up in its customers’ café in Paris, where people could get advice on which items to buy in the January sales based on their budgets. It did this based on its own research that four in 10 people frequently regret buying an item in the sales. This meant it could reach a new audience through women’s magazines and other media. It supported this through a Facebook page and game. “This meant we could talk about the sales in a very different way to how banks normally do,” Heller says.
How Gatorade is leading PepsiCo
Sports drink Gatorade has a strong presence in North America, and plans to push the brand in the UK this summer. Its strategy is to move the product from being thought of as solely a sports drink to becoming a broader sports performance brand, providing expertise for athletes and people in training.
To gather insight into how consumers feel about the brand it set up a social media hub in Chicago last April that it calls Mission Control. There, a team staffed by a mixture of people from PepsiCo and its agencies monitor conversations happening on Twitter, Facebook and other social media. The aim is to be able to react quickly to conversations involving Gatorade.
Gatorade director William Morris says his team has seen a fundamental shift from discipline-based marketing to managing communication through product teams. “Before, we had a marketing communications department, or a PR department, pushing out strategy for all our products, no matter who the target was.
“Now we have teams associated with each [Gatorade] product line looking at how people engage with the products,” he says. These conversations in turn will influence where the brand goes in terms of new product development and its communications.
Getting people with the right skills to monitor the conversations has taken several months. “You have to employ the social [media] skills, which are rare, but you also need a team that is flexible.
“My staff have fixed projects to do, but because they are also monitoring conversations they have to be able to react quickly to address [comments] through social, digital or traditional media. Their skills are very digital and analytical,” Morris says.
The aim is to address issues quickly. For example, if someone incorrectly asserts that a Gatorade product contains a particular ingredient, an analyst in the room will immediately go to the relevant PR person to take it in hand.
“These people are leading something that has never been done at PepsiCo before,” says Morris. “It is an interaction and engagement with consumers that this company has never before invested in,” Morris says.
Gatorade is now moving towards being able to measure the effect of putting particular messages into social media, as well as the kinds of sentiments people show in response. “If the spend doesn’t really push up sentiment or awareness then we move to a different channel,” he says.
Morris wants to get together a community of people who are fans of the brand but are also influential on various social media channels to use as ambassadors. He is also keen to work more closely with Facebook and Twitter on a more robust partnership rather than on one-off campaigns. “We are not just focused on Gatorade.com, we want to talk to people through every [technology] that is new and innovative.”
Viewpoint
Tom Seddon
Chief marketing officer
InterContinental Hotels Group
We used to have a digital team but now it is part of everybody’s job. If I think back to the changes we have gone through in the past three to five years, I’m not necessarily surprised by the fact that 75% of CMOs are planning to reorganise this year.
Travel has been at the cutting edge of digital for quite some time. About 80% of our customers have some form of digital interaction with us before they buy, and we have a rich opportunity to interact with people once they have bought.
Probably 20% of our business is transacted online and it is growing. The investment you need to make in your web presence is pretty high. Individual transactions might not cost much but what does is the investment needed to keep pace with change.
There aren’t many parts of our marketing organisation that don’t work in the digital space. We have just finished a relaunch of our biggest brand, Holiday Inn, which took about three years. Last year we debuted a completely integrated global campaign including our loyalty programme, confirmation emails and PR. It required a lot of people to be part of it and it helped that everyone was thinking about digital as part of their work.
The tricky part is you have to have an odd combination of frameworks and hard [fixed] ways of working, and at the same time pay attention to the human dimension, making sure people trust each other. You have to make sure people actually want to work together and I think it is easy to forget that side of things.
Using social media takes training and attention, because handling that interaction is quite different to handling a private [face-to-face] interaction with a guest. Every word you say is permanently there. We are putting better listening tools in place to make it consistent. We’ve had patchy coverage and now we are moving towards a global supplier. We operate in 90 countries so we have to listen in all the languages and then train people to follow up at a property level.
Budget is an interesting one. It is not always cheaper working in the digital space. So it is great when you can find something that is cost-effective such as the launch of our Indigo brand in Shanghai. That had a huge impact in China, which is a very complicated, expensive media market, so it would have been very hard for us to get the same level of attention via traditional means.
In terms of skills, we have had to get people working differently. In particular we have a big emphasis on integrating our messages on paid, owned and earned media, which has taken a lot of effort.
Convinced and ready to change?
These six questions could indicate how hard you will find the task of restructuring your organisation:
1 Does your chief executive champion change and innovation?
2 Do you have a siloed digital department or social media specialist?
3 How easy is it to get several teams and departments working on the same project?
4 Are individuals, skills and expertise given more credence than job titles?
5 How much of what you do serves the aim of improving customer experience?
6 Does your business allow decisions to be made quickly?
Forrester’s study spoke to 100 CMOs in the US last year.
